Kukla's Korner Hockey

Category: NHL-Business-of-Hockey

Senators owner Eugene Melnyk spoke to the media at the opening of the 'Sens Mile' on Ottawa's Elgin Street today.

There were a few questions about the team on the ice, and how far they might be able to go in the reorganized Atlantic division after losing Daniel Alfredsson and adding Bobby Ryan in the off-season, but there were even more questions about the owner's ability or willingness to pony up the dough to make the team competitive.

The Ottawa Citizen's Senators Extra has the full audio of Melnyk here (autoplay warning)

Among the stranger comments by Mr. Melnyk was when he was asked about the club's internal budget, and said that he'd "just found out yesterday" that they'd already exceeded it. This despite his admission that it was a statistical certainty that a team must be among the top half of the league to have any kind of success in a season (the Sens currently sit 26th in league spending per CapGeek.com a few spots behind the Phoenix Coyotes).

After last year's lockout-shortened campaign the NHL is back with a full action-packed 82-game schedule designed to put the league in the sporting spotlight and keep it there with a daring lineup of glossy events.

"One of the most important things to come out of the negotiations was 10 years of labor peace and that is allowing us to begin to execute the plans we have for growing the game and growing revenues," John Collins, the NHL's chief operating officer, told Reuters.

"We've added a lot of blue chip partners on the broadcast and the sponsorship side, who said they like where the game is and like where it's going and want to spend money promoting and activating around hockey.

"They need events like the Winter Classic and Stadium Series to do that."

From the great Olympic stage to an unconventional outdoor game in sunny Los Angeles, the NHL appears determined to leave no marketing stone unturned in an effort to rebuild its brand and repair the damage done by a bitter labor dispute.

George’s recent post has turned me on to Emory University’s ranking of what they’ve called ‘social media equity’ among NHL fan-bases (Detroit was first – congratulations) and the broader work they’ve done on sports marketing statistics.

My Senators have not done well in these rankings.

Ottawa ranked 26th in the social media study, and was declared to be the ‘worst hockey city in Canada’ by the authors. This conclusion follows on the heels of an earlier study released by the same authors last week, which looked at ‘Fan Equity’. This study ranked Ottawa 28th out of 29 teams (Jets were excluded, due to their move) and had the following to say:

“This is just embarrassing for a Canadian team. Let us respond to the Ottawa fans right now. We don’t care that you sell out – read the description of the method.”

I’m not a statistician, but I do love a good argument – so I’m going to take them up on their offer and try to defend the Senators’ honor. I’m going to try to do this by comparing Ottawa with the team they’ve ranked 7th 14th (earlier mistake corrected) in ‘Fan Equity’, the Detroit Red Wings.

Chris Daniels, who has reported extensively on Seattle's arena situation for Seattle's King5 TV, spoke to Sportsnet Radio 590's Bob McCown about the Arena process and the prospect of the NHL coming to Seattle and playing in the existing Key Arena. Includes a discussion about whether the NHL could come to Seattle and when any commitments would have to be made, whether the people of Seattle 'pine' for an NHL franchise, and whether the proposed Arena could be built on the back of an NHL franchise only if the NBA didn't also return to the market.

A Sacramento group opposed to a tax payer funded arena proposal - Sacramento Taxpayers Opposed to Pork, or STOP - has announced that it has acquired 18,000 Signatures paid for by Chris Hansen, the proponent of Seattle's Arena bid, and plans to use them to get a measure on the ballot to stop the arena from being built:

STOP is now in the process of verifying the validity of the 18,000 signatures. The campaign needs to collect 22,000 valid signatures from city residents by mid-December to qualify its ballot measure.

"These petitions represent the will of 18,000 people who took the time to provide their signatures and express their desire to put this tax subsidy to a vote,” Julian Camacho, president of STOP, said in a statement. “We believe it would be wrong – ethically and legally – to deny them that right.”

Even as the NHL is keeping its eye on a proposed Arena in Seattle, a group that has been pushing for an Arena in Markham, Ontario (just North of Toronto) has come forward with a new financing proposal that they hope will breath new life into their plan for a new 20,000 seat rink in the GTA.

Markham, ON, September 17, 2013 — GTA Sports & Entertainment announced today a new option for the financial framework for the proposed GTA Centre. This new option proposes that GTA Centre, LP would be responsible for funding all costs towards the construction of the GTA Centre above a maximum amount of $162.5 million, which the City of Markham would facilitate through receiving private sector developer contributions.

As a result of this new option for the financial framework, the City of Markham would no longer need to borrow $325 million — as in the original financial framework option that was approved by an 11-2 vote by City Council in April 2012 — and the GTA Centre would be 100% privately funded.

Two leading investment banking firms, Wall Street firm Jefferies LLC and Bay Street firm Canaccord Genuity have joined the GTA Centre team to support this new option.

The NHL is apparently watching closely as Seattle's Downtown Design Review Board gets ready for tonight's public review of the design for a proposed NHL/NBA Arena spearheaded by local investor Chris Hansen.

Sources with intimate knowledge of the situation, believe the NHL is now watching the status of the project, and gauging corporate and fan interest in a potential expansion franchise. Hansen has been seeking a partner who could be a tenant in a new building. Sources say NHL Commissioner Gary Bettman has been quietly pushing owners to award a franchise to Seattle, perhaps as early as next year. The NHL has denied that any talks have taken place, and sources suggest nothing has been finalized.

The NHL's Deputy Commissioner Bill Daly previously told KING5 there is not even a "handshake agreement" on a deal for a team. But he told fans in Vancouver this summer "I think Seattle would be a great market for the NHL." Ray Bartoczek and Anthony Lanza both expressed interest in buying the Phoenix Coyotes earlier this year, and relocate them to Seattle. The NHL has said repeatedly that playing in Key Arena, on a interim basis, would not be an issue.

And yet Monday night's thrilling finale to the NHL Stanley Cup Playoffs saw some of the best hockey players in the world jostle, push, and slam each other into dasher board advertisements for brands such as Honda, McDonald's, Coca-Cola and Verizon.

Players even smashed into dasher ads for Tim Hortons, the coffee and donut joint that's not well known in the U.S. but is considered a national treasure in Canada. The logo of its cross-border rival, Dunkin' Donuts, was only a few feet away, ready for the next pummeling.

Why would sponsors pay good money for such apparent mistreatment?

Because sponsors go where the fans are. And after a lockout that cut the regular season almost in half, record numbers of National Hockey League fans made a beeline to hockey arenas and high-definition television sets across North America.

NHL team owners "provided more than $3 million to politicians, PACs and independent expenditure groups during the 2012 election cycle," according to Sunlight Foundation data cited by Louis Serino in a special to PHILLY.com.

Owners contributed "more than three times as much" to Republicans, as more than $2.7M of the contributions went to "conservative causes compared to $680,000 to Democratic causes." Five teams -- the Flyers, Lightning, Wild, Blue Jackets and Sabres -- gave "exclusively to conservative campaigns."

Leafs TV, owned by the team, was launched in 2001 and immediately added leverage to negotiations to televise Maple Leafs games and helped raise the value of the franchise.

"What I can tell you, the television deal prior to Leafs TV arriving and the first contract after Leafs TV -- the rights fee per game doubled," said John Shannon, who was the vice president of programming at MLSE and now an analyst for Sportsnet.

During his time running LeafsTV, Shannon said three NHL teams approached the Leafs directly about setting up their own network, much like the Leafs did with the Yankees and their YES Network.

With teams like the Leafs, Rangers and now the Capitals leading the way, it threatens to create a gap between those NHL teams adding significant revenue through television deals or their own networks and those unable to do so.

"It drives up the revenue for the league and it drives up everyone's salary cap number," Leonsis said. "So if you're not generating more revenue while the league's revenues are going up, it means you're paying more in salary without have the additional revenues. There's this real drive to try and find more revenues so that you can keep up."

Which led to the creation to the Monumental Network. The problem for teams that don't also own an NBA team or arena, is it's a little tougher to create a network that would add leverage to local television deals. The infrastructure costs alone would take a good 10 years to recoup and a hockey team doesn't provide nearly enough content to fill a channel.